Question

求一道经济学问题！！

a. The generalized demand function for good A is:
QD=601-4PA-0.03M-12PB+15T+6Pe+1.5N
Where QDis the quantity demanded of good A each month, PA is the price of good A, M is average household income, PB is the price of a related good, T is a consumer taste index ranging from 1 to 10, Pe is the price consumers expect to pay NEXT month for good A, and N is the number of buyers in the market for good A.

i) Does the law of demand hold for this good? Why or why not?
ii) Is good A normal or inferior? Explain.
A is inferior good. Because quantity of A demanded decreases as M(income) increasing.

iii) Are goods A and B substitutes or complements? Explain.
X is not substitute of Y, because quantity of X demanded decreases as price of B(Pb) raising.

iv) Explain the effects of T, Pe, and N. Do the signs of the given coefficients make sense?
v) Graph the demand curve for this good when M=$25,000, PB=$40, T=6.5, Pe=$5.25, and N=2,000.
vi) At the parameter values given above, what is the quantity demanded when PA=$5? What is the Consumer surplus at this price?

Answer 1

i) Yes, as PA's parameter is -4, so as the price of A increases the demand will drop

ii) 答案已经在你题目里给出来了，李渗我同意答案

iii) A and B are complements, as price of B increases the demand for A drops

iv) [T]: As the consumer likes the goods better they will buy more, so a positive parameter makes sense; [Pe]: If the consumer is expected to pay more for the goods next month, they will buy more this month. This possibly makes sense if a consumer needs to buy A on a monthly basis and it should be subject to some form of constraints; [N]: As there are more buyers in the market for good A, the demand will go up. Yes, absolutely makes sense.

v) 我不可能在百度画出来，不过把数据代进去，就圆扰橘是一条直橘团线：QD = 2500 - 4PA

vi) QD = 2500 - 4x5 = 2480, Consumer surplus = (2500 / 4 - 5) x 2480 / 2 = 768,800

Answer 2

Is the question the original one? some words are perhaps wrong, such as good A should be goods A.